So what happens if banks do a lot of foreclosures and hold off on putting a lot of them on the market, for one reason or another? It means a housing bottom is postponed, perhaps for a long time. I was truly dissapointed to see that perhaps as many as two-thirds of the foreclosures - at least in certain markets - are still not in the "for sale" ranks.
http://money.cnn.com/2009/01/21/real_estate/ghost_inventory/index.htm?postversion=2009012314
Now this may be geograhically oriented, but it is still problematic. Geographically oriented or not, the fact that a significant percentage of foreclosures are still off the market is staggering.
Think about it. We have probably hundreds of thousands of houses stilll off the market that need to be sold. Even if housing recovers, this will provide a big hangover for many months to come and could complicate any housing recovery. I am still sticking by my earlier predicitions but I am leaning a bit more toward 2011 for a real estate recovery. Too much to deal with here between ARM resets, increasing unemployment, underwater homeowners and now "ghost" inventory.
Disclosures: None
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